India Growth, Stock Markets, SEBI Regulations & more..

India Growth Story Is Still On Track, says IMF

Even with a back breaking food inflation and policy tightening from the government, the India long term growth story is still very much on the right track.The International Monetary Fund (IMF). Betting on the strong fundamentals of the Indian economy, the IMF expects Indian economy to grow at 8% in the next financial year. This is considerably higher than the current 6.75% growth rate.The IMF also estimates the wholesale inflation to ease down to 5.5% in FY11.

Interestingly, the IMF wants the government to act fast on the policy reforms.It suggests withdrawing the fiscal stimulus that was provided last year since the economy is back on track. Since, the demand is picking up across the industries, they feel that the economy is good enough to accelerate without the fiscal stimulus. The relaxation in taxes and the huge fiscal stimulus has seemingly increased the fiscal deficit which can be difficult to manage if continued for long.

The IMF also sees the removal of economics stimulus as a measure of easing up the ever increasing inflation.There is also an expectation that rupee appreciation will help manage increase capital inflows and lead to stability in the markets.

So, looks like RBI did time it right while going ahead with the CRR hike a few days back. The bond market will seemingly see some action with banks being asked to purchase more bonds.

What are your predictions for the Indian Economy Growth ? Will it continue to grow at a healthy rate.

The Stock Markets continue their downward slide

The Indian Stock Markets seem to be headed downwards. The markets have corrected quite a bit from earlier levels of 17k and hovering around 16 k levels currently. The NTPC FPO offering did raise the hope of the markets yesterday but guess it was short lived. The Sensex lost 1.6% to end at 16,224.95 on account of heavy selling across various counters led hugely by Technology stocks. The year 2010 has not turned out to be very good for the Stock Markets where the Sensex has corrected almost 7% and is now expected go down even further.

Today’s decline was attributed to negative global clues. The news of sharp rise in Sovereign Credit Default Swaps of Greece, Portugal and Spain led the European markets into a crisis whose after effects were also felt in the latter half of the trade in Indian Markets.All major indexes including the IT, Metal, Realty ended in red with the OIL sector also faring badly on account of the growing uncertainty of the oil price regulations.

The Indian Stock Markets have not been able to gain momentum this year with a consistent flow of negative news from both domestic and global markets.The buyer interest is not visible in the market and traders are offloading their positions in the wake of rising food inflation which continues to rise.

The stock markets are looking quite vulnerable at the moment.How do you expect the markets to behave in the short term? Is it still a Buying market or there is more pain left

SEBI continues its effort to bring transparency in Capital Markets

SEBI has been instrumental in its efforts to bring transparency into the capital markets and make the markets more Investor happy.With a slew of reforms both for the primary and secondary markets, SEBI has now turned its focus on setting things right for the Mutual Fund sector.

After pulling out the Reliance MF ad a while back on account of not following the stipulated guidelines, SEBI seems to have revised the regulations for the Mutual Fund advertisements.SEBI has been facing the ire of some MF participants that the existing guidelines are ambiguous and do not give a clear direction.

Now, SEBI has standardized the risk warnings in advertising Mutual Fund products and the new rules will be implemented from May 1

SEBI has made it mandatory for all MF advertisements to carry a complete 5 second audio-visual disclaimer which states ““Mutual fund investments are subject to market risks, read all scheme-related documents carefully”

We all are subjected to those tall claims made by AMC’s and telesales making false claims for their product.The use of catch phrases like “ Double You Investment in 5 years” and “200% returns consistently” have become common practise.No agent or product promoter cares to explain the finer details of the investment product and they make merry off unaware investors.

I really hope that SEBI also actively make amends in the way certain Investment products are marketed.It will do a heap of help and the investors will be able to make informed decisions rather then being duped by hugely over hyped product descriptions from the marketers.